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Swatch Group publishes its first Sustainability Report
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Swatch Group publishes its first Sustainability Report

Wednesday, 11 May 2022
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Christophe Roulet
Editor-in-chief, HH Journal

“The desire to learn is the key to understanding.”

“Thirty years in journalism are a powerful stimulant for curiosity”.

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5 min read

Previously a small section of the annual report, Swatch Group now presents its sustainability strategy in a separate and detailed document. Here are some of the main takeaways.

Many of us would be hard pressed to recall the milestones in Swatch Group’s activity in favour of sustainable development these past thirty years. Indeed, the group’s communication on the subject has been remarkably low-key, condensed into a few pages in successive annual reports. This year – should anyone be in any doubt about the extent of its commitment – the group’s executives made sustainability a focus of its recent presentations to the media and to shareholders, backed by the publication of the first Swatch Group Sustainability Report, based on data for 2021. To quote the said report: “Taking responsibility for the protection of life, quality of life, health and safety, and the environment are among Swatch Group’s fundamental concerns. Environmental, ethical and social criteria have always been an integral part of its corporate culture and its sourcing policy.”

Omega is a proud supporter of Orbis International since 2011

The report opens with a reminder of the group’s sustainability track record, starting in 1992 with the launch of the Time to Move special edition Swatch to commemorate the Rio Earth Summit, and followed by other key events including the world record set by the Spirt of Biel/Bienne solar-powered car (1994), a joint venture with Daimler-Benz to produce the first Smart hybrid car (1995), the launch of the Solar Impulse project to fly around the world in a solar-powered plane (2004), the opening of the Swatch Art Peace Hotel artist residency in Shanghai (2010), a partnership with the Orbis flying eye hospital (2011) and the opening of the new Swatch headquarters in Biel/Bienne, one of the largest timber buildings in the world (2019). These are just some of the milestones in a thirty-year commitment to sustainable development from a company with a balance-sheet total of CHF 13.7 billion and net sales in 2021 of CHF 7.3 billion. It is the world’s biggest watch group with 17 consumer brands, and is also active in the electronics sector. Its 31,500-strong workforce is shared between Switzerland, where the group has some 150 production sites, and globally across some 40 subsidiaries and seven production sites.

 

Model of the new Swatch Group HQ in Biel/Bienne

Delving further into the report, environmental protection emerges as a principle that is “firmly anchored in all Swatch Group divisions and companies.” The group’s energy consumption of 371 GWh in 2021 broke down as electricity (70%), heat (23%) and hydrogen plus mobility (7%) and was covered by various sources including a small part (1%) generated by the group’s own solar and hydropower production. 13.7% of electricity consumption came from renewable sources. The report notes that in 2021 heat consumption per square metre of floor space was reduced by 5% compared with 2019. The group makes ongoing investments in its production facilities and buildings to improve energy efficiency, with new thermal insulation, renovation programmes, optimised air-conditioning and water-cooling systems, and the commissioning of new heat recovery units. By way of example, renovation of the extensions to the Omega/Swatch site in Biel/Bienne has reduced heat consumption per square metre by 48% and greenhouse gas (GHG) emissions by 55%.

 

Swatch Group in Biel/Bienne

The group has set quantified targets to further reduce GHGs and achieve climate neutrality for Scope 1 direct emissions and Scope 2 (indirect energy-related emissions) by 2050. Figures quoted in the report indicate 2021 emissions of 20,422 and 60,021 tonnes of CO2 for Scope 1 and Scope 2 respectively, giving a total 80,443 tonnes. Scope 1 emissions come from heat generation, refrigerants, production processes and fuel consumption. Scope 2 emissions result from the generation of purchased energy. The group is currently collecting Scope 3 emissions data, which relate to purchased goods, transport, waste, business-related travel and commuting, and distribution. At this stage, only passing reference is made to energy storage systems and carbon offsetting programmes, given that “carbon offsetting is not the top priority as Swatch Group wants to actually eliminate emissions and not simply offset them.”

Omega in Biel/Bienne

In order to reach these reduction targets and successfully make its energy transition, Swatch Group will focus on innovative technologies, renovation of old building structures and the use of renewable energies (wind power, photovoltaics, biogas, local wood, district heating). At the same time, it has committed to cutting its Scope 2 emissions through reduced electricity consumption while increasing its own renewable electricity production and purchasing electricity from renewable sources. “In 2013 Swatch Group signed a binding target agreement regarding stationary GHG emissions (Scope 1) with the Swiss Federal Office for the Environment (FOEN). All of the group’s Swiss production facilities are bound by this agreement and implement measures to help achieve Swatch Group’s energy targets.”

Harry Winston Premier Hypnotic Opal Mosaic Automatic 36mm

Across the supply chain, Swatch Group (which uses many local suppliers) checks for compliance with internal guidelines on environmental protection, occupational health and safety, and social policy. Suppliers are independently audited on a regular basis. With regard to precious metal sourcing, 80% of the gold the group uses is recycled from internal processes and processed in the group’s own facility (there is no mention in the report of a certification process). Primary gold from Australia, Canada or the US accounts for 16% of gold origin, the rest coming from Responsible Jewellery Council (RJC)-certified suppliers. The group avoids the use of recycled gold from external sources as there is no guaranteed traceability back to the mine. “Full traceability can be achieved with the Swatch Group sourcing strategy, which involves direct delivery from the mine to the refinery and on to the group’s own gold processing facility, as well as the use of recycled gold from internal processes.” Similarly, practically all Swatch Group diamond and gemstone suppliers are RJC-certified, with the objective to achieve full traceability of gemstones from extraction onward by 2025. The report concludes that “the target level of transparency in the supply chain will enable the social and environmental impacts of diamond and gemstone sourcing to be quantified with reasonable certainty.”

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